Reaction of primary alkyl halides with Grignard reagents in the presence (dppf)PdCl2 or (dppf)Pd(0) leads to reduction of the halide. The mechanism of the reduction is dependent on the solvent and the Grignard reagent. In tetrahydrofuran, reduction is independent of palladium. The alkyl halide is largely reduced by β-hydride transfer from the Grignard reagent. Competing with hydride transfer is a halogen-metal exchange reaction, which converts the alkyl halide into the corresponding Grignard reagent. Protonation of reaction mixture then gives the observed products. Grignard reagents that do not possess 0-hydrogens undergo the halogen-metal exchange exclusively, but still lead to reduction of the alkyl halide. At subambient temperatures and in diethyl ether, reduction of primary alkyl halides with Grignard reagents in the absence of palladium catalysts is very slow. That reduction which does occur is almost exclusively the product of β-hydride transfer. The addition of (dppf)PdCl2 markedly accelerates the rate of reduction of alkyl halides in diethyl ether. The catalytic effect is proposed to occur through a catalytic cycle involving oxidative addition of the alkyl halide, hydride-transfer, and reductive-elimination steps. The order of the first two steps remains unclear. © 1990, American Chemical Society. All rights reserved.